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VW waits as MAN ups Sonia bid
Page 7
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AMID A FLURRY of takeover speculation, Volkswagen is backing the formation of a new holding company including MAN. Scania and itself.
The German car and van manufacturer is giving the two truck makers four weeks to come to an agreement before backing any hostile bids by either company.
Scania says it will only start negotiations if MAN retracts its hostile bid, while MAN will only do so if Scania agrees not to counter-bid.
After VW's purchase of a 15% stake in MAN last week (CM 12 October), the German truck manufacturer last week bought a 14.27% stake in Scania and revised its hostile takeover hid.
MAN's second bid is an increase of 7% on the previous offer, bringing the total up to FA 0,3bn (17bn). Scania and Investor, Scania's second largest shareholder, have
since rejected that bid on the grounds that it undervalues Scania in terms of its earnings outlook and synergy potential. In the revised offer MAN suggests that combined cost-synergies would save at least €500m (£336m), though Scania believes it is worth almost double. Steven Pope, from financial analysts Cantor Fitzgerald, says: "The outcome boils down to
whether MAN can find extra savings in the next four weeks and convince Investor that a combined company would give them a return that is as good or even better." VW says that if no agreement is reached, it will offer MAN its 34% of voting rights in
Scania — as long as the truck maker's bid wins enough support from other shareholders.
At this point VW would not support a Scania counter-bid.
• Following MAN's refusal lo drop its hostile bid, Scania is fighting hack with a €756m (007m) special dividend to its shareholders.IfScania pays out. MAN says it would deduct any dividend from its offer price.